Construction industry unhappy with new infrastructure rules

Employers in Canada’s construction industry are expressing concerns about the federal government’s new rules around infrastructure projects.

Recipients of federal funding for major new public infrastructure projects are now being asked to consider how their projects can create training and job opportunities for under-represented groups, and procurement opportunities for small to medium-sized and social enterprises in an effort to “pursue targeted efforts to contribute to the employment, economic and social benefits of the community.”

The Community Employment Benefits requirement is part of the $33-billion Investing in Canada bilateral agreements being signed between Infrastructure Canada and the provinces and territories.

Segments of the population are being “left behind” due to economic barriers, according to Amarjeet Sohi, minister of infrastructure and communities.

“We want to make sure that our infrastructure investments are creating employment opportunities for those Canadians who are generally under-represented in the infrastructure field.”

Targets may sound like a great solution, but not if there are larger systemic or societal barriers, said Mary Van Buren, president of the Canadian Construction Association in Ottawa.

“Setting targets impacts (employers’) ability to manage their own workforce, so that’s where the industry would say, ‘We’re committed to doing all these good things, we want a strong Canada, we want strong communities, let us look after that’ — because they have been doing this for a long time.”

Targeting specific groups

Applicants for major projects will now be required to set and pursue targets for training and employment opportunities for groups that are identified as under-represented in the workforce or face challenges entering the workforce, including: Indigenous Peoples, women, people with disabilities, veterans, youth, apprentices and recent immigrants.

For each project over a $10-million threshold (for most jurisdictions), provinces and territories will identify at least three of these target groups to benefit through training, employment or procurement opportunities.

Provinces and territories will establish specific targets for each project, allowing for flexibility for factors such as “complementarity with existing local and regional employment initiatives or local labour market dynamics,” said the government.

“The reason we have built in the flexibility is because in different communities, there are different groups who are under-represented, so we didn’t want to be prescriptive about it,” said Sohi.

“It also allows municipalities to align their own practices if they’re engaging in Community Employment Benefits to just follow those guidelines instead of developing new guidelines.”

The employment and procurement opportunities achieved against the project targets will be reported on an annual basis over the course of the project. The reporting will help capture data on best practices across the country, highlighting the opportunities and challenges being faced by the construction industry and related sectors in this regard, said the government.

Construction concerns

Over the next decade, thousands of construction workers are going to retire, and there needs to be enough Canadians available to work in the industry, such as women or veterans returning home, said Sohi.

“By engaging them in the workforce, you can actually help deal with some of that attrition that we’re going to see… so this is good for businesses, this is good for construction companies because this will allow them to expand the pool of labour that is available to them.”

But it’s not clear why the construction industry is the focus, said Van Buren.

“There are a lot of sectors of the economy and why is it that construction is being asked to report out on these sorts of target groups?” she said.

“(Construction employers) want to run their businesses efficiently, productively, innovatively and inclusively, and having the government or governments pre-select some of that could be very challenging in how they run their businesses.”

Canada’s construction industry is very supportive of adopting innovative solutions and building a diverse workforce, but there are several challenges with these requirements, said Van Buren.

For one, the commitments will vary by province, “so that will add more complexity for our member firms who will need to understand in each province what the requirements might be.”

There are also concerns about reporting requirements, she said.

“Part of the reporting, we imagine, would mean that our members will have to have the data on these sub-segments, and we’re not sure that our members actually have this data or, in some cases, if they’re allowed to collect the information for privacy reasons, so that’s something we need to better understand,” said Van Buren.

Another consideration is whether there are groups of sufficient size that are interested and willing to work in construction, such as women, she said.

More consultation is needed to better figure out how this will work on a day-to-day basis and what’s achievable, said Van Buren, “without a huge bureaucracy around this as well because if you start to layer on a lot of restrictions or more restrictions, more reporting, that can slow down the procurement process, it can slow down the project. And then if the project is delayed, that delays the important infrastructure work that is being done in these communities, so (it’s about) looking at how we keep this as effective and helpful as possible.”

Pursuing employment equity

The government is introducing a process by which there’s a form of employment equity, said Armine Yalnizyan, senior economist at the Canadian Centre for Policy Alternatives in Ottawa.

“It’s a deliberate strategy to build up skills,” she said. “Some proportion of the hires would be dedicated to vulnerable populations, equity-seeking populations, marginalized populations, people with higher unemployment rates than the average for the community.”

“In Canada, we’ve got about three-quarter trillion dollars in public infrastructure expenditures already on the books for the next decade, by federal and provincial levels of government… and given where we’re at in terms of slow global growth and the potential for further slowing of growth because of trade ‘sensitivities’… we have to make sure every tax dollar is doing double and triple duty.”

That double duty is about making sure you’re giving job opportunities and skills training to people who might not otherwise get it and consequently be wage-scarred for the rest of their years, said Yalnizyan.

“If they don’t get in at the beginning, it’s hard to catch up — you have a lifetime of poor earning and skills development opportunities.”

But it’s no easy task, as it involves dealing with truly marginalized populations, she said, and trying to give them a fair shake, and “getting them into the pipeline for talent is no mean feat.”

It’s about working with trade unions and community members, and finding people who are ready to move into the pipeline, bringing them up to speed so they are ready and willing, and the timing is right, said Yalnizyan.

And making the requirements mandatory is critical, she said.

“When you talk about these things in principle but there’s no enforceability, it’s just window dressing.”

In the areas where these things have become requirements, such as Detroit, they just become the rules of the game, said Yalnizyan.

“The proponents, the contractors, will play by whatever rules of the game you put in place, and what it does is normalizes it, so ‘OK, when we build now, we build with these things in mind, we’re not only building a physical thing, were building a community’ — that’s what a public investment means.”